Correlation Between Boston Beer and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both Boston Beer and ATRESMEDIA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Boston Beer and ATRESMEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boston Beer and ATRESMEDIA, you can compare the effects of market volatilities on Boston Beer and ATRESMEDIA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Boston Beer with a short position of ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and ATRESMEDIA.
Diversification Opportunities for Boston Beer and ATRESMEDIA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and ATRESMEDIA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA and Boston Beer is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Boston Beer are associated (or correlated) with ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of Boston Beer i.e., Boston Beer and ATRESMEDIA go up and down completely randomly.
Pair Corralation between Boston Beer and ATRESMEDIA
Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the ATRESMEDIA. In addition to that, Boston Beer is 1.57 times more volatile than ATRESMEDIA. It trades about -0.04 of its total potential returns per unit of risk. ATRESMEDIA is currently generating about 0.09 per unit of volatility. If you would invest 332.00 in ATRESMEDIA on November 9, 2024 and sell it today you would earn a total of 121.00 from holding ATRESMEDIA or generate 36.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. ATRESMEDIA
Performance |
| Timeline |
| Boston Beer |
| ATRESMEDIA |
Boston Beer and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and ATRESMEDIA
The main advantage of trading using opposite Boston Beer and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, ATRESMEDIA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.| Boston Beer vs. Haverty Furniture Companies | Boston Beer vs. ARDAGH METAL PACDL 0001 | Boston Beer vs. DISTRICT METALS | Boston Beer vs. Stag Industrial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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